What is Trade Marketing? – History, Steps, Target Sectors, and More
Table of Contents
What is Trade Marketing?
Trade marketing is a branch of marketing that seeks to increase demand at the distributor or retailer level, at levels other than the consumer.
However, he does not forget to maintain brand management strategies to sustain the consumer sphere’s need. In itself, trade marketing consists of promoting a company’s product in front of a retailer.
It improves its chance of promoting it better than its competitors. It can do by offering both tangible and intangible benefits to retailers.
The main objectives of trade marketing are to boost and accelerate consumption and sales, improve product rotation at the point of purchase, plan and coordinate promotions, develop merchandising and branding, and generate traffic.
The History of Trade Marketing
This marketing type creates approximately 25 years ago when promotions focused on large retailers began to be made.
In the 90s, it became more important due to the media’s fragmentation, the retail business’s consolidation, and the categories’ management.
It thinks of as a way to solidify the exchange with distributors and retailers.
In this way, trade marketing was born. The new area sought to support marketing and sales, taking charge of developing and executing a point of purchase activities.
Steps of Trade Marketing
Trade marketing has different steps or essential points to take into account, among others:
These are points that should be studied and taken into account in a good marketing plan and specifically when thinking about trade marketing.
Target Sectors of Trade Marketing
Due to the great importance that now has to manage the point of purchase, it is essential to direct efforts to specific target sectors, among others:
1. Distributors / Wholesalers
Partners in the trade channel act to ensure inventory and consumer availability in all the territories as it sells.
The role of these entities is critical in helping the product to distribute to the end consumer widely.
2. Physical points of Sale
Physical points of sale are retailers. A retailer is one of the targets in trade marketing.
Part of a trade marketing plan should be to focus on customers and buyers.
What to Look for in a Trade Marketing professional?
A company has two options regarding its trade marketing strategy: direct it to a specialized agency, outsource, or do the work itself. The second option is to dedicate a specific team for this, assigned within the marketing sector.
Professionals working in this segment must accumulate a series of skills, techniques, and personal characteristics that qualify them to perform correctly in their work.
Each level requires different preparation, and below, you will find out a little more about the performance and what these professionals need!
1. Trade Marketing Manager
Ahead of operations and with the proposal also to supervise the teams’ work, the manager has the central role of developing strategies. To do this, you need to have reports and results of indicators and metrics that help you make the right decisions.
To fill this position, the manager needs to master some characteristics, experiences, and qualifications such as:
Extensive knowledge of marketing;
Work history within the segment;
Perception of marketing trends ;
Analytical capacity on KPIs and metrics;
Team management and leadership skills;
Ability to develop campaigns;
2. Trade Marketing Analyst
The professional acts in the operational, field, and office part, taking care of the data and turning it into a factual basis for management analysis.
These professionals report to the manager and, in their routine, qualifications, and characteristics such as:
Ability to handle data;
Generate relevant indicators for the strategy;
Understanding of marketing in depth;
Create acceptable operating practices based on strategies;
And also, an organization to meet Trade Marketing routines.
What are the Advantages of Adopting Trade Marketing?
There are very concrete and easy to realize the advantages of placing Trade Marketing as an essential strategy. This practice has been common in the market for more than 20 years.
This day it remains critical for producers, even with the advancement of digital. Next, gain a better understanding of the key benefits that the strategy can offer.
1. More Sales
The producer needs to reach his shopper with a product that comes to an exciting sales volume that generates investment capital, production, and profits.
On the other hand, the association point of sale also needs that the products he buys also have an exciting outlet.
Trade Marketing is a tool that generates this profit for both parties!
2. Greater Audience Perception
Fieldwork directly results in the visibility that merchandise has for the target audience, even if they don’t know the product.
Perception is the first step, so that from there, there is the possibility of considering buying.
It happens all the time, from a newly released item to those already occupied your retail space for years.
3. Market Dominance
Market dominance expects to be one of the main results of applying this strategy.
The idea is that with an efficient relationship with a good shopper, a good exposure of the product in the channels, and specific marketing actions, a broad domain obtain.
That represents, in addition to presence, being chosen frequently at the time of the purchase decision.
What is the Purpose of Trade Marketing?
Objectively and succinctly, the main goal of Trade Marketing is to get more sales. Although it is the central proposition of every business, many other factors must adequately address.
In this proposal, the brand’s exposure to the primary shoppers is the main point and the beginning of a successful path.
Rather than displaying products through various channels, these outlets must be the ones that make sense for the company’s strategy. It is not enough to be in many places, but a refinement of these outlets is required.
It is precisely because of this detail that, when we talk about the purpose of Trade Marketing, it is necessary to deepen what you can see below!
1. Strengthen the Brand
Strengthening the brand is a typical job when it comes to marketing. It extends to the work of relationship with the public, quality service, advertising, and actions on social networks because we live in the digital age.
However, whoever produces must ensure that their merchandise is visible to the consumer and with an appropriate and prominent image.
Trade Marketing has practices that strengthen the brand precisely by a union of essential factors that create a specific opinion about these products. These points in question are:
Presence in the moments of sale where the target audience is searching;
The innovation about marketing;
Good exposure at points of sale;
Shared space with other competitors;
Outstanding actions within distribution channels such as supermarkets, shopping centers, among others.
2. Exposing Products to the Market
As many people think, the strategy is not just about that, but exposure within sales channels is essential. After all, how do you buy a product if it is not visible?
A Trade Marketing strategy must plan where the products are and how they will position in those places.
An excellent job aims to explore gondolas and shelves well and act with sampling, that is, the distribution of free samples.
This set of practices arouses the consumer’s attention and, consequently, generates curiosity.
If you’re not already a customer, this independent approach can be the starting point for a consumer relationship.
3. Define the Ideal Distribution Channels
If you could answer without overthinking, what do you think is more beneficial: having merchandise sold at the best shoppers in town or the right places? The point is that the most prominent place is not always where your audience is.
First, it is essential to know where these people are, their purchasing power, and, especially, which shopper they frequent.
Only in this way will a company know which distribution channels are more likely to have a good sales volume since its customer is there.
From this, work that begins is one of the negotiations and good relationship, already lasting.
And also, a beneficial relationship for both the producer and the shopper.
The ultimate goal of trade marketing is for your product to be represented on the shelf, in a privileged position, with enough inventory at the physical point of sale.